Christmas Casino Emerges as Latest Casualty
~ by Rick Langenberg ~
The current coronavirus crisis has crippled many local businesses with commerce coming to a standstill, such as no action period at local casinos.
With this blow, the city of Cripple Creek must pick up the pieces and grapple with two huge blows: a record low number of betting devices and the mandatory closure of all casinos for the next month and a half. The immediate financial beating will exceed $300,000.
As a result of these financial impacts, the city will hold a special meeting today this week. Interim City Administrator Paul Harris, who also serves as the finance director, will outline the steps the city must take to survive. On the cutting, block could include special events, theater shows, recreation perks, marketing and much more. “We are going to be looking at anything that is not essential right now,” said Harris. At the meeting, Harris will reveal the total financial impact that could include hundreds of thousands of dollars due to additional tax revenue the city will lose in historic preservation and state gaming funds due to the across-the-board casino industry shutdown.
With the mandatory closure of all casinos from now through at least the full month of April, the city plans to waive device fee payments for that period, according to Harris. The city is also putting on hold a scheduled 5 percent rate increase for water and sewer rates for most residents, and won’t proceed with any cutoffs for delinquent payers.
Part of a Downward Trend
Harris is well versed in dealing with slumping times in Cripple Creek. “We have really been on a downward trend since the smoking ban and Great Recession,” said the interim administrator. Previously, he headed the city’s financial ropes, when a statewide smoking ban went into effect and the industry seriously struggled with the national recession of 2008, when the country nearly went bankrupt and big banks and financial institutions had to get bailed out.
These events had a serious impact on the industry, leading to more closures. However, they represented a gradual downturn, and not a single event that led to across-the-board business closures. “We have never gone through anything like this before,” related Harris.
Although the gaming industry has recovered in the last few years and posted small gains, the city has seen a continual decline in betting device fee revenue, their prime funding source. Even prior to the coronavirus scare, the city was bracing itself for an all-time low in the number of betting devices and games, as the gaming industry was only gearing up for 3,435 slots and card tables, at the beginning of the next quarter in April.
This represents a 34 percent decline in the number of devices on the floors of gaming halls since the peak of gambling action, following the opening of the Wildwood Casino about 11 years ago. This recent trend is further highlighted by the closure of the Christmas Casino, operated by Bronco Billy’s, and owned by Full House Resorts. That has been a hard gaming property to run, as it has experienced a variety of owners and operators with limited success.
In a report in The (Colorado Springs) Gazette, the casino, which featured an elaborate Christmas theme, was slated to close due to revenue falling below the owners’ expectations. It reportedly wasn’t generating enough revenue to cover expenses. The Christmas casino, patterned after certain establishments in Germany, was the newest gaming property to open in recent years. It was formerly operated by the Imperial and then by Jim Druck, the former owner of the Gold Rush.
“That (Christmas Casino) was scheduled to close regardless of the coronavirus,” said Harris.
The virus scare also may delay the scheduled start of a major $70 million hotel expansion by Full House in Cripple Creek, with the first stage consisting of a mega parking garage.
A Time for Tough Decisions
More details will be unveiled this week regarding the specific impacts for the city.
The elected leaders could face some tough decisions during today’s meeting. The March 24 meeting could also represent the final public meeting, until the coronavirus situation improves. The public is invited to this forum on a first come basis, with seating only permitted for 10 people.
The chairs will be spaced around to allow for social distancing. The meeting will follow new standards that only require one council person to attend.
Following this meeting, the city will most likely conduct future forums electronically, without any public attendees. The exact details haven’t been worked out yet.
This is a trend that all local governments are pursuing.
The main question local leaders are facing: How long will the closures (of bars, restaurants and casinos) last? This giant question mark has been the giant albatross hanging over government and business leaders in the last week.